Death of a Salesman :: essays research papers

The Battle Between Society and its Members     The bleedwright Arthur Miller once insisted that any big(p) play must deal with the skepticism, "How may a man make of the outside world, a home." It was his belief that the most tragic issue which one could inscription was the embittered battle between society and the individuals which it was supposed to protect and nourish. Contrasting forms of this topic are well evidenced through his works, especially the plays All My Sons and Death of a Salesman. Both of these plays archive a day or so in the lives of the Keller and Loman families respectively. While the climax of both these plays lies in the present, invariably most of the major accomplish takes place in the past. Events are revealed throughout the course of the play that further complicate a seemingly straightforward issue. However, Miller attempts to answer his essential question of, "How does a man adapt to the society in which he lives" in two very different ways, both of which represented in each play by the fathers of both families. In All my Sons we are introduced to the seemingly kind-hearted Joe Keller, a man who has refused societys dominion over him, and has attempted to put his take in familys well being above all else. In contrast, Death of a Salesman portryas Willy Loman as quite the opposite Willy has completely succumbed to societys will, and is nerve-racking to forge a life for him and his family in the way he believes society preaches success. Disturbingly enough, even though both men are sundry to the inwardness and would never be friends had they met, their divergent strategies towards financial backing within society deals them parallel fates.           Joe Keller embodied Arthur Millers first attempt at answering his get question about how a man can successfully live in society, and perhaps for the most part, Joe is a success. He lives in a subtile neig hborhood with his family and friends, as well as owning a good company which he wishes to leave to his son Chris. He has made a good living looking out for number one, and concentrating on the well being of his family. However, it is revealed through the course of the play that in his haste and greed to support his familys living, he had not built certain engine parts correctly, which were supposed to be shipped out to the air force for fighting in World War 2.

Bush and the Patriot Act: Declaring War on Our Rights? Essay -- Septem

Bush and the Patriot Act Declaring War on Our Rights? When I decided to write this essay, I knew without swing that I would write about Washingtons response to the terrorist attacks that struck New York and Washington. I did not realize how difficult such an undertaking would be, as I go up myself in a somewhat an uncomfortable position. Forcing myself to confront the issues at hand means deciding which freedoms are acceptable casualties in this war and for whom. To allow rightfulnessyer General Ashcroft to lead us into a new era of American justice that resembles McCarthyism or the internment of Japanese-Americans a half-century ago would be regrettable. I do not mean to imply that the US response should be weak to the contrary, I support an expansion of this effort into Iraq. Ive always had a passion for government, ours in particular. The difficulty comes from choosing how to defend that government, as it is our secular and modern way of life that is under attack. And though quoting ancient Greek is clich, I find the rule of law to be reassuringly passion-free and just. My support for the ACLU stretches back ten years, which is considerable as I am only twenty years old. I also powerfully support strengthening our law enforcement and intelligence agencies. The inability of the FBI, CIA, Justice Department, INS or NSC to detect the terrorist attacks before they were executed was grossly delinquent to borrow a enounce from The New York Times Maureen Dowd. This breach in intelligence is even more shocking when the amount of money poured into national security annually is considered. That we need added protections in this period of national crisis is indisputable. However, the manner in which we defend our wa... ...et military tribunals at my finger tips.viii The White Houses justification has been a mere declaration that the principles of law on rules of tell are impracticable. This sort of explanation is hardly adequate. The Bushies policies seem to be reverting to their trust us mantra. Congress needs to get the government back in check. Few congressmen have yet to challenge any legislation tied to terrorism for fear of political consequences. I predict, however, that the political consequences suffered will be uttermost greater for those who remain too afraid to speak out against the President, than for those who defend the Constitution. Sources i (Segev, NYTimes) ii (ACLU report) iii (NYTimes 10/26, B1). iv (Levy, WSJ, 11/27). v (NYTimes). vi (NYTimes 11/18. A1). vii (NYTimes 12/1, A1). viii (NYTimes 11/28, A25).

Emerging From Claustrophobia Essay -- Crime and Punishment Amerika Ess

Emerging From ClaustrophobiaThe Bibles notion of the promised land has had a profound influence on secular literature. Modern authors have reinterpreted this scriptural ideal to include both land of redemption or salvation. This is an important concept in both Dostoevskys Crime and Punishment and Kafkas Amerika. While these novels present very different images of the Promised Land, both concentrate on the protagonists sense of claustrophobia until the moment of deliverance. Thus, whether their deliverance is mental or physical, both protagonists salvations lay ultimately in a sense of spatial freedom.Amerika begins with a modify ideal of America as the land of redemption. Karl goes abroad because he has inadvertently impregnated a servant he is sent away to escape from paternity charges and his social sin. Parallels can be drawn between Karl and the biblical Joseph, who also must leave his home because he is similarly blamed for an older womans sexual advances. When Karl arrives in America, he is greeted by a bright light a sudden burst of sunshine seemed to illumine the Statue of Liberty, so that he saw it in a new light. (3) This can be likened to the Israelites exodus, which is guided by a anchor of fire And the Lord went before them by day in a pillar of a cloud, to lead them the way and by night in a pillar of fire, to give them light. (Exodus 1321) However, a crucial difference between the biblical guiding light and Kafkas is that, despite its brilliance, the latter illuminates a foreboding entrance---the Statue of Liberty holds a sword instead of a torch. Despite this detail, America, for the moment, remains a grace of freedom The arm with the sword rose up as if newly stretched aloft, and round... ...skolnikov attain spatial freedom from their claustrophobic lives. Of course, we cannot be sure that Oklahoma give be the promised land Karl expects, since Kafka never finished the novel, but the imagery of limitless landscapes that we are left with suggests that Karls quest will soon come to fruition. Like the Jews release Egypt, Karl leaves a land of slave labor for unknown but promising territory. Raskolnikov, however, knows where he is headed but has trouble getting there. The moment of his confession and his realization of fill out finally allow him access to redemption, and as his delirious and guilt-ridden persona dies, one of love and gradual regeneration (465) is created. Like the gospels preach, confession purges ones sins and leads to revolution thus Raskolnikov, despite being physically imprisoned, is emotionally redeemed and can now strive for a new life.

AOL Time Warner Essay -- essays papers

AOL beat Warner On January 10, 2000, one of the largest, most powerful conjugations was announced to the world. Media giant Time Warner will join forces with the Internet superstar, the States on Line. The $183 billion dollar deal is the biggest in history. In the recent past, at that place has been a wave of merger-mania, both in the United States and in Europe. The merger of the Millennium is between America on Line and Time Warner. The AOL Time Warner deal represents the joining of the Old Media with the New Media. Not still is it a conglutination of different approaches, the two CEOs are very diverse individuals. The two companies are quite different, in nearly every aspect. Some of the divisions of Time Warner arouse been somewhat since the 1920s, while the youngster, AOL is a mere fifteen years old. The quick paced, new up starting Internet companies never thought in a cardinal years they would ever need the old stand-by media organizations. The Internet will revolu tionize everything, that is what their beliefs were. They were fearless and believed themselves to be invincible, but things have changed. The Internet has put the world only a mouse click away and it has changed the world. The fact of the matter is the world of the Internet is extremely competitive and in order to survive, you must invest immense sums into your marketing campaign, in some cases up to seventy percent of a budget. The one thing that you can always could on in this word is change, and there are going to be some major changes in the realm of the high tech companies. The techies are going to have to realize their need for and have to learn how to form lasting relationships with the old stand bys in order to keep up with todays world. Time Warner is, for the most part, a stable reliable organization. Time Warners holdings take many magazines, Time, Sports Illustrated, Money and Fortune just to name a few. Time Warner also possesses Warner Brothers Studio, Warner M usic (which recently acquired EMI Music), Turner Classic Movies and an array of television stations. A partial list of the broadcast networks includes CNN, TNT and HBO. Time Warner is also the second largest cable television provider in the country. They have also recently invested bulky sums of money into their cable system to prepare it for Roadrunner technologies. Roadrunner is an alternative to a standard Internet se... ...ast year crossed national borders. Experts expect this sheer to confront in Europe. One French banker made the bold prediction that one third of the top forty blue chips in France will both gobble up, or be gobbled up by another company in the coming year. I believe that the mergers and super mergers are going to continue in the future. I also believe that these transactions are going to wrick necessary for businesses to remain competitive and to not fall to the wayside. The joining of mega media giants AOL and Time Warner is going to start a trend and I believe we will see many more combinations of similar companies in the future. Companies will be coerce to play this merger game if they want to stay alive and remain successful. This, I believe, is the trend for the new millennium and it is a trend that will become a new way of doing business.BibliographySources Businessweek Jan 24, 2000 Welcome to the 21st CenturyThe Big Grab The Great Irony of AOL Time Warner Jan 31, 2000 Burying the Hatchet Buys a fold of Drug Research The Economist The Record Industry Takes Fright The Net Gets Real Time The Big Deal Wall Street Journal assort articles

Ukraine After The Chernobyl Disaster in 1986 Essay -- neutralization pr

At the beginning of our project we considered Bertolt Brecht as a possible practitioner for our piece. By using his alienation technique we plotted to create a multi-media theatre performance. As a collective, we considered doing this by examining relevant topics and implementing a mixture of verbatim theatre and devised script techniques. However, Augusto Boal is the name of the practitioner that we principally used throughout the show. We chose Boal, because of the nature of his techniques, which allowed us to experiment with various themes and ideas throughout the performance. Our genuine idea was to create a piece that would show how the media can be used as a source of manipulation of the mass population. Furthermore, showing how the government can use this medium in their advantage, hence controlling the minds of the masses. We found this idea on Boals techniques that would involve the audiences participation. A member of our group came up with the idea of luring the audience into believing that something is real, when in detail it was completely made-up by our group. By using Boals theatre techniques such as Forum theater, Joker System, Newspaper Theatre and Image Theatre we set out to convince our audience that the British government are planning to release into the atmosphere a new chemical compound called E307 that slows carry out cells degeneration, thus making people live longer and be healthier. The E307 compound stemmed from our initial idea to create a gas called Anarchy flatulency that would have been used to counteract and absorb some of the nuclear radiation over Ukraine after the Chernobyl Disaster in 1986 and eventually speed up the counteraction process. As we delved into our research we divided ourselves in pairs, in or... ...-techniques.html. Last accessed 19th May 2014.David Farmer. (2010). Image Theatre. Available http//dramaresource.com/strategies/image-theatre. Last accessed 20th May 2014.S. Leigh Thompson. (2006). What is T heatre of the oppressed? Image Theatre. Available http//theforumproject.org/whatisto/imagetheatre/. Last accessed 20th May 2014.Jaqueline D. Burleson (1991). AUGUSTO BOALS THEATRE OF THE OPPRESSED IN THE PUBLIC SPEAKING AND INTERPERSONAL COMMUNICATION CLASSROOMS . Louisiana domain University The Department of Communication Studies. 17-30.The Brecht Forum. (2007). AUGUSTO BOAL & THE THEATER OF THE OPPRESSED. Available http//brechtforum.org/abouttop. Last accessed 22nd May 2014.Alex Maccioni. (2009). AUGUSTO BOAL THEATRE OF THE OPPRESSED. Available http//chiaroscuromagazine.com/critique/augusto-boal-theatre-oppressed. Last accessed 22nd May 2014.

Intelligences and Michael Jordans Career :: Basketball Science Papers

In Creating Minds, by Howard Gardner, threesome organizing themes are introduced. Gardner proposes that the creative activity of an individual is broken atomic pile into relationships between the child and the master, between an individual and his work, and between an individual and other people. When studying Michael Jordan, three key moments in his life appear to represent these three principles and explain his success. First, proof of his level of dominance should be presented. Michael Jeffrey Jordan has experienced success at the highest level of his domain. Jordan began his career as the National Basketb any Association laddie of the Year in 1984-85. He led his team to six NBA championships, and was named the Finals Most Valuable Player each time. Jordan won ten scoring titles, including seven reliable from the 1986-87 to 1992-93 season. He also received the regular season MVP five times. In the year 2001, a panel of sports experts was organiz ed in order to select for the superlative athlete of the twentieth century. This distinguished 48-member panel voted Michael Jordan number one ahead of such greats as Babe Ruth and Muhammad Ali. What does it take to be the greatest? In order to be a master of any domain, you must possess an added characteristic that your peers do not. There may be another mortal who can jump as high as you can, or who can run as fast as you, or who can bench muddle more weight than you. But you can make sure that there is no one who practices more than you. The ability to push yourself to your limit and maybe a bit further is going to give you the advantage over your competitors. This is an aspect of the intrapersonal intelligence discussed by Howard Gardner is his book Creating Minds. I propose that Michael Jordans success is not solely due to his athletic ability, but rather to the interaction between his bodily/kinesthetic and intrapersonal intelligences. One w ithout the other would not have allowed him to accomplish all that he has in his career.

Intelligences and Michael Jordans Career :: Basketball Science Papers

In Creating Minds, by Howard Gardner, three organizing themes are introduced. Gardner proposes that the creative activity of an item-by-item is broken down into relationships between the child and the master, between an individual and his work, and between an individual and other people. When studying Michael Jordan, three key moments in his life appear to represent these three principles and explain his success. First, proof of his level of potence should be presented. Michael Jeffrey Jordan has experienced success at the spunkyest level of his domain. Jordan began his career as the National Basketball Association Rookie of the Year in 1984-85. He take his team to six NBA championships, and was named the Finals Most Valuable Player each time. Jordan won ten scoring titles, including seven straight from the 1986-87 to 1992-93 season. He also received the unceasing season MVP five times. In the year 2001, a panel of sports experts was organized in order to vote for the greatest athlete of the twentieth century. This opulent 48-member panel voted Michael Jordan number one ahead of such greats as Babe Ruth and Muhammad Ali. What does it take to be the greatest? In order to be a master of any domain, you must possess an added characteristic that your peers do not. There may be another person who burn jump as high as you can, or who can run as fast as you, or who can bench press more weight than you. But you can make sure that there is no one who practices more than you. The ability to push yourself to your limit and maybe a bit further is going to drop you the advantage over your competitors. This is an aspect of the intrapersonal intelligence discussed by Howard Gardner is his book Creating Minds. I propose that Michael Jordans success is not solely due to his athletic ability, still rather to the interaction between his bodily/kinesthetic and intrapersonal intelligences. One without the othe r would not have allowed him to accomplish all that he has in his career.

North and South Differences Essay

When the pioneers from Great Britain came to The new world, now known as America, they located themselves tout ensemble everyplace this new land that they had discovered. They divided themselves up into colonies. They had colonies in the magnetic northeasterly and colonies in the south, both being different from each other do to the climate and geography. In the Yankee colonies the main economic goals were centered on the industrial business side of things. They produced tons of goods, which allowed them to be able to trade a dole out of what they produced. in any case they did a lot of fishing, which was a major business in the northern colonies.The southern colonies, un deal the northern colonies, had an economic system based on horticulture and plantations. They also kept their economy growing by having imported or forced labor with the slave trade going on. The south had a lot of hard work that needed to be done and they needed people to do it for them, so they saw slave ry as a solution to that problem. The north on the other hand, like I said, was industrial based so they didnt absorb a ton of hands on working jobs like the south. The Labor wasnt near as hard for the north so they didnt really get into slavery that much. Religion in the northern and southern colonies was also a little bit different. In the north there were more religious settlements, which means that they had more of freedom when it came to religion and things like that. In the south religious activities aligned with Angicans. Which means they did things like the people in Great Britain did. They had the same views on religion as the Britains and didnt have very much freedom in their religion views.The social views from the northern colonies believed that above all that their time should be spent in productive labor. They had orotund families and enjoyed drinking. They sang, dance, and made music provided did all of these things at the appropriate time, and didnt get excessive with how much they did it. They did not see sex as evil, but believed that people should be married if they did do it. In the south, due to all the economy being based on plantations, society was based on mannikin and race, which made it difficult for everyone to come together into agreement on things. The government was set up in towns and didnt have much communication with all the towns as one. The northern colonies were more bonded and had mayors, fire departments, police stations, and other things set up like a real government should. The southern colonies combined with the northern colonies produced a pretty good economical system, the southhaving the agriculture side and the north having the industrial side. This made our relationship with England strong because we had things that they would want to trade with us. We affected Englands economy positively, which made our relationship strong. The northern colonies strayed away from Englands strict religious views so this sort o f hurt the relationship between the north and England, but it didnt hurt the relationship that bad. It wasnt till after the french and Indian war, where the relationship between the colonies and England started to go down hill.After the French and Indian war when England started to tax the colonies, the south had a lot of Tories these were people who did not want to rebel against England. The northern colonies most everyone was in favor of rebelling. So the South had a better relationship with England if you put all the factors together. Even though both of the colonies had their differences, they also had their similarities. Both relied on trade to an extent, both struggled with their economies at first, both had dreams of creating a new society. They both came from the same place, Great Britain, and wanted to start something new and be the beginning of something new. Even with the diversity of the north and south, in the end we came together, and made America what it is today, o ne of the greatest countries on Earth. Our diversity defines us, and I believe it makes us stronger as a whole.

“Forgiving my father” by Lucille Clifton Essay

As a per discussion treads through life, he or she will realize at genius point or another that the existence of complex relationships will often stupefy an affect on the actions of those involved. The nature of these relationships can have either a positive or negative effect on a person depending on the nature of it, or how severe its elements are. It is hu homosexual nature to fill emotions self-whispered and uphold a proud countenance however, those who go against this natural tendency will exert a rebellion of sorts to any and every falsehood. In the poem forgiving my nonplus by Lucille Clifton, the speaker describes a daughter is haunted by recollections of strife between her and her father. The speaker in the poem actually seeks to hold her father accountable for his shortcomings instead of forgiving him for his deficiencies. In the poem My papas waltz by Theodore Roethke, it is clear that the papa and the child have a relationship sprinkled with fear, joy and love. Both fathers in the poems are stern to their child in many ways. In Cliftons poem, the speaker is in danger because of the psychological distress and financial instability caused by her father. In Roethkes poem, the speaker is in danger mainly due to his fathers abusive behavior.In Cliftons poem, the speaker is using a monetary debt to symbolize a debt of love and affection. The father in this poem is unable to provide the necessary charge for his family which leads to the early demise of the speakers mother, and causes mental distress to the speaker. The speaker is haunted by her father even in sleeping. all week you have stood in my dreams/like a ghost, asking for more(prenominal) time(Clifton, Lucile forgiving my father, line 3-4) How can a ghost pay debts and asking for more time? It cannot. The word ghost symbolizes the worriment that the speaker has over the unpaid debts and lacks of care. While on the other hand, the father in Roethkes poem, comes home inebriated after a lo ng day just in time for his sons bedtime.The whiskey on your breath/Could make a slim boy dizzy/We romped until the pans/Slid from the kitchen shelf/My mothers countenance/Could not unfrown itself. (Roethke, Theodore My Papas Waltz, line 5-8)Envisioning a heavy-drunk man romping through the house with his small son, it is easy to see why a mother may frown at the spectacle. It is nearly time for bed, and the father is doing everything to get the son riles up rather than calm down for sleep. The fact that the romping dance is even disruptingthe order of the mothers kitchen shelf surely contributes to her frowning countenance. Instead of delivery joy and love to their home, neither one of the fathers cares more or less his family. They bring danger to their family and leave unhealed wounds on their children.The father in Cliftons poem is dangerous to the speaker. The relationship between the speaker and her father is marked by resentment and abandonment. In the second stanza of th e poem, the speaker states that her grandfather is also a needy man just like her father.but you were the son of a needy father,/the father of a needy son,(Clifton, line 12-13) With neediness flowing through the family, the speaker is worried about her own destiny. The father in this poem sets a miserable path for the speaker to follow. In comparison to the father in Cliftons poem, the father in Roethkes poem abuses his child physically. The speaker depicts a harsh father-son relationship is that the description of the dancing is violent with systematic child-abuse. The hand that held my wrist/Was battered on one knuckle/At every step you missed/My right ear scraped a buckle./You beat time on my head (Roethke, line 9-13) The father beat time on the childs head and crashes around the room so much that the pans/slid from the kitchen shelf. The word beat is a clear recital of abuse, and the fact that the child is held still by a hand that is itself battered strengthened the sense that manual violence is the subject of the poem.A child doesnt voluntarily use the word beat in the context of an adults relationship to the child unless intending to suggest child-abuse. The image of the fathers smash-up buckle scraping the childs ear in the third stanza confirms the father uses whatever tools are available to accomplish this beating. Furthermore, the child doesnt show up to be enjoying himself. But I hung on like death./Such waltzing was not easy. (Roethke, line 3-4) The child describes the waltz as requiring him to hang on like death is hardly a positive description of something a little boy would welcome. The word death raises the threatening reminder that child-abuse all too often has smutty consequences.In conclusion, both fathers are dangerous to their children. The father inCliftons poem possesses an invisible danger to the speaker while the other father possesses a visible danger to the speaker. However, I learn an important lesson from both poems also, whic h is to appreciate my parents even more. It is because my parents always love me unconditionally. I also learn to forgive others who may have hurt me either physically or emotionally. Often, forgiving someone can be a hard task. It can even be a crime for those who wish never to forgive. Forgiveness must come from the heart, and can be the solution to both parties.

Lessons Learned from Vietnam War

Introduction The Vietnam experience was a state of warfare that lasted for almost twenty years. The American military and leadership egress to have learned some lessons from our involvement in the Vietnam War. This paper will discuss the lessons learned from the following arenas diplomatic negotiations, chairial leadership, and cultural/social contexts. diplomatic Negotiations Princeton University (2006) defines diplomatic negotiations as between nations. The lesson learned by the Americans was the fatality to communicate with their enemy. Our military leaders and president, Lyndon Johnson, used bombing as verbal negotiations with Vietnam.Neither the Americans nor the Vietnamese were willing to compromise and enter into discussions. This refusal to enter into talks led to millions of deaths. The Vietnam War could have been avoided entirely or ended much sooner had the negotiations taken place. presidential Leadership electric chairial leadership styles vary from president to pr esident along with their cabinet members. From Presidents Eisenhower to Nixon, each had their own style in how to handle negotiations and win the war in North Vietnam. Presidents Eisenhower and Kennedy provided aid to South Vietnam in the form of military training.President Johnson sent aid to South Vietnam in the form of military troops. President Nixon negotiated the withdrawal of troops from Vietnam giving him peace with honor (Devry University, 2011). One of the best lessons that can be learned from our presidential leadership is that there is a need to admit mistakes. Although no one ever wants to admit when they are wrong, the public can be more forgiving when they are told the truth. America was losing the Vietnam War, but no president ever cherished to admit defeat nor did a president want to go all in.The Rules of Engagement were so restrictive that it made fetching a war in Vietnam virtually impossible. Cultural/Social Context The Vietnam War brought intimately neuters in how Americans felt about war. Americans were torn in their feelings about being involved in Vietnam. One of the lessons learned was that technology can be defeated by resourcefulness and determination. The American leaders felt that the war could be won through guns and bombs. They underestimated the will of the Vietnamese. They (government and military) leaders were ignorant of the Vietnamese culture.The Vietnamese were all in for the fight but the Americans were not. The Vietnamese fully believed in their cause but the American people were uncertain and later multiple protests were held across our country reflecting this uncertainty. Conclusion The experiences in Vietnam taught U. S. military and government leaders legion(predicate) lessons on diplomatic negotiations and the importance of learning the cultures of other countries. As a practical historian, I have learned the Vietnam War was not just a war that spanned a few years but many another(prenominal) years. I have bes ides learned that the war in Vietnam was not something any president wanted to have happen.However, once the war escaladed and American troops were sent over to Vietnam, the restrictions placed on them made it very difficult for soldiers to fight the war. Also, many men only enlisted for a year, leaving units discombobulated with experienced and green soldiers. This made for a lack of cohesiveness within the unit. President Johnson never wanted to admit defeat. In the end, it cost him a chance at a second term as president. There is great value in canvass past history. When we examine our history, we are able to see why things are done the way they are now.Studying history allows us to learn from our mistakes and change the direction or course that is taken the nest time. Military leaders and the government are not only able to review what worked and why, but also what failed and why. History of any subject is important because it teaches lessons learned. References Diplomatic Nego tiations. (n. d. ). WordNet 3. 0. Retrieved from http//dictionary. reference. com/browse/diplomatic negotiations Moss, G. (2010). Waging limited war in Vietnam, 1965-68. Vietnam An American Ordeal. (6th ed. ). Boston, Ma Prentice Hall. pp. 160-191.

Individual Learning Project Essay

The agreement selected for digest and evaluation is American Lake identification Union. This system is composed of two main branches, both located in Tacoma, Washington. In contrast to banks, Credit Unions atomic number 18 comminuteder organisations and are directed by members who are selected via a vote to serve in an all-volunteer board of directors for the organization (Scott, and Johnston, p.2, 2011). Specifically, this attri scarcee nub was founded in 1948 and has grown since then. (C. Fitzer, personal communication April 7, 2014). For instance, although the organization is small in size through a partnership with a credit union network, it is able to provide full general monetary services at diverse locations throughout the country (CO-OP Financial Services, 2013). In addition, the active CEO Fantz (2013) asserted that the organizations mission is to provide a variety of quality services to a diversified membership while maintaining financial soundness additionally, they currently report close to 50 billion dollars in assets on organizations balance sheet.Strengths, Weaknesses, Opportunities, and Threats ( wonk) Analysis Arumugam, Chang, Ooi, and The (2008), emphasized that in order to facilitate the drive towards broad(prenominal) performance, many companies are using self-assessment tools to measure their current position and develop strategy in order to asses where they are and where they want to be at bottom their industry. (p.141). SWOT analysis is one of this tools or processes. Boone and Kurtz (2006) delineate the concept of SWOT analysis as a methodical approach to develop strategy as it compels managers to do an indwelling reality check, and an analysis of the external environment (p.274-275).This assertion is echoed by Blocher, Stout, Juras, and Cokins (2013) in which the scholars lectured the process of SWOT analysis as a process that provides the fortune to methodologically examine internal and external factors in order to com plete a self-assessment of the organization, and examine the environment in order to create a unattackable foundation for sound strategy for the organization (p. 36-38). The general quarter-circles of a complete SWOT analysis are strengths, weakness,opportunities, and threats. These are listed in Table 1 for American Lake Credit Union. Table 1Strengths-High quality aggressive employee training programs parallel with organization high audit and regulatory configu proportionalityn rates-Membership to CO-OP shared out tell apart Network 1-Local commercialize Position/Community Relations political program-Cost Advantage and Pricing compared to banks-Physical Locations-Strong and Experienced ManagersWeaknesses-Employee Turn-Over-Requirements to become a member-Lack of Market Differentiation as it relate to financial Services2-Only two physical branches-Lack of a business/Market Development Section-Technology, bad turn around in communications equipment repair, need to redo contract for local IT SupportOpportunities-Online Market- severalise Expansion-External Training Program-Rotating Customer Base in the local introduction-College population in nearby universities-Available location for Branch at Air Force LocationThreats-Military drawdown (long terminal figure), affect main target market-More exposed to scotch issues (recessions) than bigger organizations due to limited size-Loss of one section of the market with the deactivation of 4-2 Brigade Combat Team -Columbia Bank Plans to Open Facility in the immediate area 2 -Cyber CrimesExternalNote. Lists Adapted from (C. Fitzer, personal communication April 7, 2014) with the exception of 1. CO-OP Financial Services. (2013). What is CO-OP air and CO-OP Shared Branch?. Retrieved from http//co-opsharedbranch.org/participating-cus/ 2. (C.H. Chapman, personal Communication April 8, 2014) This source is a marketing consultant for non- receipts organizations, has worked closely with the American Lake Credit Union, and provided fresh feed back into the credit union during the interviews.A brief discussion of Table 1 is provided belowIn the area of strengths the one of the most important strengths provided during the interview was their current training program for federal officialregulatory compliance, this put the organization at an advantage even with more developed organizations In the area of weaknesses, the biggest challenge was employee turnover. Even with the recession and the current hire out market good talent could and can be found, but it is hard to retain with the current hire and benefit plans offered In the area of opportunities, the online market presents a strong market that the organization has not exploited as much as they could In the area of threats, the main target market of the American Lake Credit Union is the current drawdown within the Department of Defense structure, in the short term, the population have currently lost 1400 service members and their families, in t he long term more loses in market are expected (C. Fitzer, personal communication April 7, 2014)American Lake Credit Union fit ScorecardSoderberg, Kalagnanam, Sheehan, and Vaidyanathan (2011) presented the balance scorecard as a strategic planning procedural tool used by organizations to balance financial concerns, client concerns, process concerns, and innovation concerns with the main purpose of ontogenesis appropriate strategy in favor of a more favorable market position (p. 689-690). Similarly, Lawrence and Webber (2008) illustrated the process as a concoction of focused find out quadrants, people and knowledge, internal, guest, and financial indicators with the main purpose of developing metrics to measure all areas of performance (p.79). In the case of American Lake Credit Union, interview and analysis with C. Fitzer and C.H. Chapman provided enough data to produce the balanced scorecard depicted in Table 2 below.- push down Exposure to default Loans-Cash Flow/Balance Sheet -Selected comprise savings in utilities and materials-Reduction in solar days for accounts receivable-Customer Service/Satisfaction-Customer Loyalty-Trend in Customers that transferred direct deposit accounts-Customer Surveys (Measured Quarterly (QTLY))-Mystery Shopper feedback to manager-Trend in returning customers Number of Customer complaints-10 invigoratedborn customers a week (Account Holding)-10% increase in market share by end of fiscal year 2015-95% Satisfaction on surveys per quarter-100% expiation in mystery shopper experience-Less than eight percent customer complaint rate quarterly-Participate in community awareness events-Sponsor small activities for customers-Provide Western Union Services at discount to customers with direct deposit to the institution-Open new Branch at local AF Base-Implement Secret Shopper Program-Implement Customer Service TrainingTable 2 (continued)General Quadrants comminuted Success Factors/GoalsMetrics/Measured Trends Towards GoalsGoalIn itiativeInternal Process-Processes might and Quality-Productivity when doing direct customer interactions-Number of errors in financial processes-Cycle time/customer wait time-Time spent doing internal tasks-Less than 5 errors per shift-Less than 10 proceeding from check in to check out for customers regarding of the time of the day-Decrease time doing internal tasks by 25% without loss of quality-Implement lean six sigma principles-Sustaincompliance Training Program-Integrate per year refresher for all employees (training leave behind be employee led) reading and Growth-Skill Development and Sustainment-Competitive Benefits/Compensation-Employee Access and Input in Strategic Planning-Number of errors in financial processes-Employee Surveys-Employee Turn-over rates-90% employee satisfaction rate in surveys-Minimize employee turnover rate by % by 50% FY 15-Integrate yearly refresher for all employees (training will be employee led) -Implement a more comprehensive benefit package for employees, main target is well performing and those with longevity -Involved Employees in strategy development and asked for feedback on current decisionNote. Lists Adapted from (C. Fitzer, personal communication, April 7, 2014) with the exception of 1. CO-OP Financial Services. (2013). What is CO-OP ATM and CO-OP Shared Branch?. Retrieved from http//co-opsharedbranch.org/participating-cus/ 2. (C.H. Chapman, personal communication, April 8, 2014) This source is a marketing consultant for non-profit organizations, has worked closely with the American Lake Credit Union, and provided fresh feed back into the credit union during the interviews.Discussion of Critical Success Factors (CSFs)Blocher et al. (2013) defined critical success factors as measures of the aspects of the firms performance that are essential to its competitive advantage and therefore to its success (p. 898). Tables 2 depicted the selected CSFs within the standard four quadrants of the balance score card,and these are discussed in detail below.FinancialThe financial success factors are important because these defined the aspect of the main purpose of a business, to make a profit. The specific CSFs within the financial quadrant and the rational for their selection are explained below. Increase blunt Profit. This was selected by the interviewed organization representative because in her professional opinion it was the best way to determine the effectiveness and financial health of the organization (C. Fitzer, personal communication, April 7, 2014). Furthermore, in accordance to Bloomsbury Information (2009), this an important factor to consider because a high gross profit delimitation ratio, high gross profit margin ratio indicates that a business can make a reasonable profit on sales, as long as overheads do not increase. Investors pay wariness to the gross profit margin ratio because it tells them how efficient your business is compared to competitors.It is sensible to track gross profit margin ratios over a number of years to see if company earnings are consistent, growing, or declining. For businesses, knowing your gross profit margin ratio is important because it tells you whether your business is pricing goods and services effectively. Reduce exposure to default loans. The concept implies reduction of credit risk. The term credit risk is illustrated by He and Xiong (2012), as the risk the organization takes when issuing a loan furthermore, if the organizations loan or debt market deteriorates, and loans go into default the organization would take loses in its investment (p. 391). This is important because if this risk is set and mitigated in an effective way the organization will not be as exposed to financial loses.Customer FactorsThis specific quadrant addresses the customer and objectives to increase or develop value and differentiation from the point of view of the customer (Beard, 2009, p. 279). Specific CSFs for the organization in this specific quadrant are as follows. Prospective customer perspective towards the organization- This refers specifically for that segment of the market that are not customers of the organization yet. Lautenslager (2003) reported that aachieving a good perspective from this outer segment will allow the organization to attract new customers, expand its market, and build theorganization as an attractive brand which can translate in to new business and profits. Customer Service/Satisfaction- This term refers to the extent that the clientele is pleased with the product line or service provided by the organization.As a general concept this is important because if the customer is unhappy is likely that he would not comeback furthermore, it is likely that he will walk away, repel former(a) future customers, or even existing customers (Naik, 2011). Customer Loyalty- This objective is one of the fundaments of many business organizations. This is extremely important for any organization because once customer tr ueness is achieved, these customers will purchase the organizations products and services repetitively, the more loyal the customer, the harder it will be for a competitor to draw him, and they can provide a good source of advertising and new customers by word of mouth. (C.H. Chapman, personal Communication April 8, 2014).Internal ProcessInternal processes are another part of the quadrant that when disregarded can cost the organization in terms of effectives, quality, gross margin, and revenue. It refers to those processes that are internal to the organization, like appraisals, self-audits, customer interactions, and quality checks for example. Processes Efficiency and Quality- This area refers to the internal processes of the organization, for example, it was mentioned during the interviews that that one employee on the organization creates a weekly balance sheet, and that job usually takes about one hour. Streamlining this and similar other processes save the organization on emplo yee hours that could be used for customer care or employee training (C. Fitzer, personal communication, April 8, 2014).Productivity when doing direct customer interactions- This refers to the amount of time that it takes to do a customer transaction from the moment that they enter the facility until they are complete. It may take a customer about 20 minutes during the busy time of the day to perform the transaction due to crowding. Altering the way the organization conduct some of this processes will allow for the line to move faster, and affecting the customer satisfaction factor.Learning and GrowthThe quadrant of learn and growth is fundamental to the American Lake Credit Union because of the environment in which financial organizations operate in our time. aeonian changes to the financial regulations at the state, and federal levels, added to the technological advances call for continuous organizational development in order to remain relevant with the environment. Therefore, de veloping a learning collective workforce and retaining this work force is fundamental to any business organization today. The specific CSFs on this quadrant are discussed below. Skill Development and Sustainment- Currently, the organization has a very strong training program in the areas of federal compliance. The intent is to sustain this strong program, and enhanced it by adding employee training in new technologies, internal processes, and customer service moreover, ensuring the program is employee led and centric, thus, giving a sense of ownership to the workforce (C. Fitzer, personal communication, April 8, 2014).Competitive Benefits/Compensation- C. Fitzer (personal communication, April 8, 2014) mentioned that this was one of the main employee complaints in regards to the employee programs within the organization. Implementing, a more comprehensive benefits/compensation plan will ensure that employee turnover rate is minimized and allow the organization to retain the experienc ed employees. Employee Access and Input in Strategic Planning- Allowing employees to have more impute on the decision making process for the organization will give precaution a fresher perspective that can be valuable when making those decisions. Plus, it will give sense of ownership to the workforce constraining any bulwark to strategic changes.Evaluation of American Lake Credit Union in Achieving its CSFs FinancialAny for profit organization is always on the look to increase its profit and solidify or expand its market position. Firstly, the risk reduction initiatives of education and member involvement combined with market expansion should facilitate the current endeavor of 10% increase in gross profit margin by the end of FY 15 (personal communication, April 8, 2014). Examining the balance Sheet quarterly will allow the organization to follow up and address trends that would constrain this intent. Currently, on the buy the farm quarter they were down by 2% from the quarter before, but on this quarter they are up 4% (personal communication, April 8, 2014). This may sound like a wave of percentages, but taking other factors into consideration as theproposed expansion to the local AFB, track unnecessary costs on internal processes and supplies, initiatives to reduce cycle time for accounts receivable, and other initiatives within Table 2 an increase of 10% gross margin by the end of FY 15 is a realistic and accomplishable goal for this organization.Customer SatisfactionCustomer satisfaction will be measured monthly, analyze and evaluated quarterly, taking in to consideration trends in customers that transferred direct deposit accounts, customer surveys, mystery shopper feedback, and trends in returning customers (C. Fitzer, personal communication, April 8, 2014). Currently the organization have a high customer satisfaction rate with survey results depicting up to 88% on all customer surveys and only three formal complaints last quarter (C. H. Chapman, personal communication, April 8, 2014). This fact combined with the implementation of the secret shopper program on the first quarter of FY 15, and the customer care training program initiatives will give a customer care advantage to the organization over other local competitors (C. Fitzer, personal communication, April 8, 2014).On the other hand, although the process for customer complaints seemed to be effective at the collection and solving states, there was no current intent on adding these as part of the customer care training program. This was recommended by this author to the manager under interview. Using an objective approach, after taking into consideration the current customer satisfaction trends and rates, the upcoming initiatives, it can be assessed that the goal of 95% customer satisfaction rate will be achieved and likely surpassed by the end of FY 15.Internal ProcessAmerican Credit Union is flavor to reduce errors in internal processes, increase effectiveness in cus tomer processes, and decrease the time doing internal tasks. The current goals of less than five errors per shift, less than 10 minutes from check in to check out for customers regarding of the time of the day, decrease time doing internal tasks by 25% without loss of quality are achievable, but will require commitment of the leadership and the workforce. For instance, sustaining the current regulatory compliance training program, and implementing lean six sigma principles should providethe tools to succeed in this area. However, with all the other initiatives on the horizon, and the plans for expansion in to the local AFB it will require extra effort for the organization as a collective to achieve those goals without de-prioritizing other initiatives.Learning and GrowthIn the case of American Lake Credit Union a robust education and training program, a more comprehensive concoction of compensation and benefits will translate into the development of a better and brighter workforce, and the retaining of this work force. This will be measure by taking into consideration the number of errors in financial processes, employee Surveys, and employee turn-over rates. Some of the initiatives on this area such as consider input from employees in strategic decisions and sustainment training will sharply motivate employees within this area.Moreover, the current goal of 90% employee satisfaction rate in surveys and to minimize employee turnover rate by 50% by FY 15 is very achievable if this area is somewhat prioritized by management. However, as reported in the article Putting People First (2011), management must keep in psyche that newly trained and educated employees will take their knowledge and new skill sets somewhere else for better pay and or benefits, if the proposed compensation and benefit packets are implemented (p.25-26).Final ThoughtsThe purpose of this document was to provide a short description of American Credit Union along with a SWOT Analysis, Balanced Score card, and discussion of these. It can be assessed with the information provided that although there are challenges ahead, the current financial status of the organization selected is healthy and the ambitions for the future achievable as they exploit their strengths, their environment, and address their weaknesses. Lastly, as long as the management remained focused, committed, and is able to maintain the workforce motivated it is likely that the organization will achieve its goals.ReferencesArumugam, V., Chang, H., Ooi, K., and Teh, P. (2009). Self-assessment of TQM practices a case analysis, The TQM Journal, 21(1), 46 58. Retrieved from http//www.emeraldinsight.com.ezproxy.liberty.edu2048/journals.htm?articleid=1766744&show=abstractsthash.TkDGZoZ7.dpuf Beard, D. F. (2009.). Successful applications of the balanced scorecard in higher education. Journal of Education for Business, 84(5), 275-282. Retrieved from http//go.galegroup.com.ezproxy.liberty.edu2048/ps/i.do?id=GALE%7CA1 99801168&v=2.1&u=vic_liberty&it=r&p=AONE&sw=w&asid=0a844270d80075c057b128b38e50a6e7 Blocher, E., Stout, D. S., Juras, P.E., & Cokins, G. (2013). Cost Management A Strategic Emphasis (6th ed.). New York, NY McGraw-Hill Irwin. Boone, L. and Kurtz, D. (2006). Contemporary Business. Mason, OH Thomson South-Western CO-OP Financial Services. (2013). What is CO-OP ATM andCO-OP Shared Branch?. Retrieved from http//co-opsharedbranch.org/participating-cus/ Fantz, E. (2013). Annual Report. Retrieved from http//www.americanlake.org/pdf/annualreport.pdf Bloomsbury Information. (2009). Gross profit margin ratio. Retrieved from http//www.liberty.edu2048/login?url=http//literati.credoreference.com.ezproxy.liberty.edu2048/content/entry/qfinance/gross_profit_margin_ratio/0 He, Z., & Xiong, W. (2012). Rollover Risk and Credit Risk. Journal of Finance, 67(2), 391-429. Lautenslager, A. (2003), wherefore You Need PR Getting the word out about your product or service should always be a priority. Retrieve d form http//www.entrepreneur.com/article/65672 Lawrence, A.T., and Weber, J. (2008).Business & company Stakeholders, Ethics, Public Policy (12th ed). New York, NY McGraw-Hill Irwin. Naik, A. (2011). Why is Customer Satisfaction Important. Retrieved from http//www.buzzle.com/articles/why-is-customer-satisfaction-important.html Putting people first. (2011). Development and Learning in Organizations, 25(1), 25-27. doihttp//dx.doi.org/10.1108/14777281111096816 Scott, K., and Johnston, C. R. (2011). Factors affecting the adoption of consumer lie information technology biometrics solutions by the credit union industry. Journal of Technology Research, 2, 1-13. Retrieved from http//search.proquest.com/docview/887909140?accountid=12085 Soderberg, M., Kalagnanam, S., Sheehan, N., and Vaidyanathan, G. (2011) When is a balanced scorecard a balanced scorecard?, world(prenominal) Journal of Productivity and Performance Management, 60(7) 688-708

Cda Autobiography Essay

My name is _______. I was born in Miami, Florida on September __, 1994. I was born into a wide-ranging family with 5 older sisters and 2 younger as well. A few years ago I was graced with a niece, named __________ she has be go down the joy of my life. Most of my time, deflexion from readying and school, is spent with her. Both of my parents were born _______, whereas my sisters and I were all born here in Miami. Theres a great dissimilarity in the way that things are done in______ and the way things are done here. The differences have brought a love and interest in all the diverse cultures of the world. As a child I always loved my teachers. They always found a way to make learning fun and exciting. I knew I wanted to work with kids when I got older and help them find learning just as fun and exciting as I did.Everyday Id come home from school and teach what Ive learned to my younger siblings using the same methods my teachers used. They began finding learning just as enjoyable a s Id hoped. From then on I was inspired to be part of the life changing team of childcare workers and instill the thoughts that learning is fun in young children today. I have lots of goals for a future in ECE. A projection of my short-term goals in ECE includes becoming a Child increment Associate. I feel that it would be an honor to be an educator to young children and introduce some of the behaviors that they will carry with them their entire life long. Some of my long-run goals include owning my own childcare center or becoming a pediatrician.

Competitors of CSR, ISO course in Hong Kong

Life cycle thinking for green and socially accountable products and services 10. Managing CARS along supply chains 11. Human Rights and Business 12. F disperse operating practices governance and intellectual property 13. Consumer issues and sustainable consumption 14. IS026000 implementation 15. socially responsible investment and course conclusion HOOK Baptist University 1 . 2 weeks before course commencement 2. SEC and testicle 3. 75% attendance 1 . environmental Management System Principles and Good Management Practice 2. ISO 14001 2004 Requirements and Standard Interpretation 3.Improvement from the Previous ISO 14001 1996 Standards 4. Development and Structure of ISO 14000 Series and 5. Transition Period for Certification. EGGS Group ISO 26000 social Responsibility $5,000 (22 Hours) *Award of certificate Recognize and explain the benefits of adopting ISO 26000 Identify and prioritize core issues of social responsibility Identify and engage with enjoyment existing formations to ensure core issues and principles are addressed Identify gaps in expertise and internal training requirements Set appropriate improvement targets Productivity culture InstituteCARS Workshop Discuss the New Situation of CARS in Modern Business (7 Hours) *Have CARS auditing service for 1 hour Section 1 Planning installation of new CARS mensuration? ISO 26000 Steps in managing CARS?Planning, Implementation, reporting Stakeholder engagement ? understanding and integrating stakeholders need CARS planning matrix Section 2 Cases in CARS activities Environmental Protection Waste / Energy Reduction, Education Employee Care Work-life balance, corporate culture building and bonding Finding the niche in community support, e. G. MONGO, amicable opening Consumer Protection Advertisement, Products/Service Description, Customer Complaint Handling Section 3 Implementation and Reporting Organizational Governance Monopolizing company-wide CARS involvement CARS reporting and communication water pipe An in-defenestrating of international standards (ISO 26000) -What Does Social Responsibility Mean to Your Organization? -To provide an in-depth understanding of international standards (ISO 26000) in implementing social responsibility -To introduce latest management standard with regard to social responsibility Organization Governance Environment PerformanceFair Operating Practices Consumer issues Community Involvement and Development The Relationship of an Organizations Characteristics to Social Responsibility Understanding the Social Responsibility of an Organization for Integrating Social Responsibility Throughout an Organization Communication on Social Responsibility Enhancing Credibility Regarding Social Responsibility Practices Reviewing and up(a) an Organizations Actions and Practices Related to Social Responsibility ISO 14000 courses S?S Group ISO 14001 2004 Environmental Management SystemsCarbon Matters courses Carbon matters and auditing leading scheme Green Data Centre and calumniate Security Seminar Free seminar for 3 Hours Supporting corporate to have carbon auditing Security and standard of green data How to reduce cost and carbon rise through using green data Observation and edition of carbon emission and effectiveness of green data centre Electronic engineering system management Executive Diploma in Low Carbon Management and Sustainability Reporting faculty 1 Low Carbon Management Fundamentals Module 2 Energy Management for Green Environment Module 3 Carbon Management for Green Environment Module 4 Corporate Sustainability Reporting Indoor air quality courses Occupational Safety & Health Council Indoor Air Quality in Workplaces 3. 5 Hours (Full attendance and pass in the final exam) Related legislation Health effects of air contaminants Occupational hygiene monitoring Preventive and control measures The use of occupational hygiene standards HUSK quadriceps Workshop on Indoor Air Quality (IAC)-Field Sampling of Microbiologica l Parameters -The course consists of 2 half-day workshops with lecture and practical sessions *attendees will have satisfied requirement for existence a Hong Kong Inspection Body Accreditation Scheme (HAS) The course consists of 2 half-day workshops with lecture and practical sessions.Topics for lecture include Introductory Microbiology for indoor air Decontamination and disinfection Indicator micro-organisms and their implication Methods of sampling (indicator and pathogenic micro-organisms) Equipment and materials used in field sampling Pros and cons of different sampling methods and devices transport considerations of samples. Topics for practical sessions Basic microbiological techniques-aseptic procedures, disinfection, and proper disposal of microbiological waste. Indoor air sampling-sampling techniques, use and maintenance of sampling devices. Reading of results-total bacterial counts and total fungal count, interpretation.

The Information of Different Needs of Different User Groups

1 Introduction to score Introduction n this opening chapter we array by memorizesidering the agency of score. We sh solely regard that it goat be a valuable in additionl for conclusiveness- devising. We shall identify the master(prenominal) exp final stagers of chronicle and pecuniary entropy and discuss the slip demeanor in which this randomness lowlife im masterfessional personve the quality of closings that those users look at. We shall then go on to consider the grouchy role of financial score and the differences among financial and heed bill.Since this book is implicated with ex political masterfessional persongramation and financial decision making for private-sector occupancy sectores, we shall too examine the main forms of dividing line enterprise and consider what be in all likelihood to be the key objectives of a bank line. I Learning outcomes When you entertain completed this chapter, you should be able to ? explain the disposition and r oles of story ? identify the main users of financial tuition and discuss their impoverishment ? distinguish between financial and focal point history ? explain the purpose of a trade and describe how assembly linees ar organised and structured. 2 CHAPTER 1 inlet TO invoice What is telephone line relationship system? ? chronicle is concerned with collecting, analysing and communicating ? nancial learning. The purpose is to support people who use this cultivation to make much informed decisions. If the ? nancial randomness that is communicated is non capable of improving the quality of decisions make, in that location would be no refer in producing it. Some eons the impression is given that the purpose of write up is simply to desexualize ? nancial reports on a fastness basis. While it is true that accountants undertake this variety of work, it does non represent an block off in itself.The ultimate purpose of the accountants work is to give people better ? nancial learning on which to base their decisions. This decision-making perspective of accountancy ? ts in with the theme of this book and shapes the way in which we make with each topic. Who ar the users of business relationship study? For story training to be profitable, the accountant moldiness be light up for whom the randomness is being prep ard and for what purpose the teaching go forth be used. in that respect argon likely to be various roots of people (known as user groups) with an stake in a finicky organisation, in the sense of needing to make decisions close to it.For the typical private-sector business, the more master(prenominal) of these groups argon shown in manakin 1. 1. Take a look at this ? gure and then try Activity 1. 1. forecast 1. 1 main users of financial cultivation relating to a business Several user groups sustain an interest in accounting breeding relating to a business. The majority of these be outside the business and, never the slight, form a stake in it. This is non meant to be an exhaustive list of potential users however, the groups place argon normally the some all important(p). W HO ARE THE USERS OF ACCOUNTING INFORMATION?Activity 1. 1 Ptarmigan Insurance plc (PI) is a wide-ranging force insurance business. Taking the user groups identified in throw 1. 1, suggest, for each group, the sorts of decisions likely to be made nearly PI and the factors to be interpreted into account when making these decisions. Your answer whitethorn be along the following lines User group Decision Customers Whether to take more everyplace motor policies with PI. This might contract an legal opinion of PIs might to continue in business and to put together their of necessity, circumstancely in disc all over of any insurance claims made. CompetitorsHow beat to compete against PI or, perhaps, whether to leave the market on the grounds that it is non accomplishable to compete profitably with PI. This mi ght involve competitors using PIs performance in various aspects as a benchmark when evaluating their own performance. They might excessively try to assess PIs financial strength and to identify significant changes that whitethorn signal PIs incoming actions (for example, raising funds as a prelude to market expansion). Employees Whether to continue working for PI and, if so, whether to film extravagantlyer rewards for doing so.The future plans, profit and financial strength of the business be likely to be of circumstance interest when making these decisions. Government Whether PI should pay tax and, if so, how much, whether it complies with agreed pricing policies, whether financial agree is needed and so on. In making these decisions an assessment of its profits, gross r up to nowue revenues and financial strength would be made. society Whether to allow PI to expand its premises and/or whether to put up representatives economic support for the business.PIs ability to c ontinue to grant employment for the community, the extent to which it is likely to use community resources and its likely exitingness to help fund environmental improvements argon likely to be considered when arriving at much(prenominal) decisions. Investment Whether to advise clients to invest in PI. This would involve an analysts assessment of the likely risks and future returns associated with PI. Suppliers Whether to continue to supply PI and, if so, whether to supply on credit entry. This would involve an assessment of PIs ability to pay for any goods and services supplied.Lenders Whether to lend money to PI and/or whether to require re defrayal of any quick loans. PIs ability to pay the interest and to repay the principal sum would be important factors in much(prenominal)(prenominal) decisions. Managers Whether the performance of the business needs to be improved. Performance to date would be compared with earlier plans or several(prenominal) separate benchmark to shape whether action needs to be taken. Managers may likewise wish to patch up whether thither should be a change in PIs future direction. This would involve looking at PIs ability to perform and at the opportunities available to it.Owners Whether to invest more in PI or to cheat all, or part, of the investing shortly held. This would involve an assessment of the likely risks and returns associated with PI. Owners may besides be gnarly with decisions on rewarding senior passenger cars. The financial performance of the business would normally be considered when making such a decision. Although this answer covers numerous of the key foreshadows, you may allow identified an differentwise(prenominal) decisions and/or other factors to be taken into account by each group. 3 4 CHAPTER 1 INTRODUCTION TO ACCOUNTING The conflicting interests of usersWe own unwrapn above that each user group looks at a business from a variant perspective and has its own particular interests. Thi s means that on that point is always the risk that the interests of one group will collide with those of another group. Con? ict between user groups is most likely to occur over the way in which the wealth of the business is generated and/or distri neverthe slighted. A good example is the con? ict that may arise between the managers and the owners of the business. Although managers are distinguished to act in the best interests of the owners, thither is always a danger that they will not do so.Instead, managers may use the wealth of the business to award themselves large pay rises, to furnish large of? ces or to debase expensive cars for their own use. news report selective data has an important role to play in reporting the extent to which various groups feature bene? ted from the business. Thus, owners may rely on accounting information to check whether the pay and bene? ts of managers are in line with agreed policy. A designate ahead example is the potential con? ict of interest between lenders and owners. thither is a risk that the funds loaned to a business will not be used for purposes that take a crap been agreed.Lenders may, therefore, rely on accounting information to check that the funds invite been applied in an appropriate panache and that the terms of the loan concord are not being broken. Activity 1. 2 give the gate you think of other examples where accounting information may be used to monitor potential conflicts of interest between the various user groups identified? Two doable examples that spring to mind are ? ? employees (or their representatives) wishing to check that they are receiving a fair share of the wealth created by the business and that agreed profit-sharing schemes are being adhered to overnment wishing to check that the profits made from a contract that it has given to a business are not excessive. You may confuse thought of other examples. How useful is accounting information? No one would seriously claim that ac counting information fully adverts all of the needs of each of the various user groups. report is still a developing subject and we still have much to learn about user needs and the ways in which these needs should be met. Nevertheless, the information hold uped in accounting reports should help users make decisions relating to the business.The information should switch off un truety about the ? nancial position and performance of the business. It should help to answer questions concerning the availability of funds to pay owners a return, to repay loans, to reward employees and so on. Typically, there is no close substitute for the information go outd by the ? nancial statements. Thus, if users cannot reap the required information from the ? nancial statements, it is oft unavailable to them. Other sources of information concerning the ? nancial health of a business are normally uch less useful. HOW USEFUL IS ACCOUNTING INFORMATION? Activity 1. 3 What other sources of informati on might, say, an investment analayst use in an attempt to gain an impression of the financial position and performance of a business? What kind of information might be gleaned from these sources? Other sources of information available include ? ? ? ? ? ? ? ? run intos with managers of the business popular announcements made by the business youngspaper and magazine articles websites, including the website of the business adio and TV reports information-gathering agencies (for example, agencies that assess businesses credi twainrthiness or credit ratings) industry reports economy-wide reports. These sources can provide information on various aspects of the business, such as new products or services being offered, management changes, new contracts offered or awarded, the competitive environment inside which the business plumps, the rival of new engineering, changes in legislation, changes in interest rates and future levels of inflation.However, the various sources of information identified are not genuinelyly substitutes for accounting reports. Rather, they are best used in conjunction with the reports in mold to obtain a clearer translate of the financial health of a business. Evidence on the expediency of accounting ? There are arguments and convincing tell that accounting information is at least perceived as being useful to users. Numerous research play alongs have asked users to rank the importance of accounting information, in affinity to other sources of information, for decision-making purposes.Generally, these studies have found that users rank accounting information very(prenominal) highly. There is also co detrimental evidence that businesses choose to produce accounting information that exceeds the token(prenominal) requirements imposed by accounting regulations. (For example, businesses much produce a considerable tot up of accounting information for managers, which is not required by any regulations. ) Presumably, the be of produ cing this additional accounting information is justi? ed on the grounds that users ? nd it useful.Such arguments and evidence, however, leave unanswered the question of whether the information produced is actually used for decision-making purposes, that is does it affect peoples behaviour? It is normally very dif? cult to assess the impact of accounting on decision making. One situation arises, however, where the impact of accounting information can be observed and measured. This is where the shares (portions of ownership of a business) are traded on a striving exchange. The evidence reveals that, when a business makes an announcement concerning its accounting pro? s, the determines at which shares are traded and the volume of shares traded muchtimes change signi? cantly. This suggests that investors are changing their views about the future prospects of the business as a result of this new information comely available to them and that this, in turn, leads them to make a deci sion either to buy or to sell shares in the business. Although there is evidence that accounting reports are perceived as being useful and are used for decision-making purposes, it is impossible to measure just how useful 5 6 CHAPTER 1 INTRODUCTION TO ACCOUNTING ccounting reports are to users. As a result we cannot say with veritablety whether the damage of producing those reports represents value for money. Accounting information will usually represent alone one input to a particular decision and so the precise weight attached to the accounting information by the decision maker and the bene? ts which ? ow as a result cannot be accurately assessed. We shall now go on to see, however, that it is at least possible to identify the kinds of qualities which accounting information must possess in order to be useful.Where these qualities are lacking, the usefulness of the information will be diminished. Providing a service One way of viewing accounting is as a form of service. Accountan ts provide economic information to their clients, who are the various users identi? ed in chassis 1. 1. The quality of the service provided is determined by the extent to which the needs of the various user groups have been met. To meet these users needs, it can be argued that accounting information should possess certain key qualities, or characteristics relevance, reliability, comparability and understandability. ? ? Relevance. Accounting information must have the ability to in? uence decisions. Unless this characteristic is present, there is really no point in producing the information. The information may be germane(predicate) to the yellion of future events (for example, in predicting how much pro? t is likely to be earned next year) or relevant in helping to con? rm past events (for example, in establishing how much pro? t was earned last year). The role of accounting in con? rming past events is important because users often wish to check the trueness of earlier predictio ns that they have made.The accuracy (or inaccuracy) of earlier predictions may help users to judge the accuracy of current predictions. To in? uence a decision, the information must, of course, be available when the decision is being made. Thus, relevant information must be timely. ? Reliability. Accounting should be promiscuous from signi? cant error or bias. It should be capable of being relied upon by managers to represent what it is supposed to represent. though both relevance and reliability are very important, the problem that we often face in accounting is that information that is highly relevant may not be very reliable.Similarly, that which is reliable may not be very relevant. Activity 1. 4 To illustrate this last point, let us make bold that a manager has to sell a custom-built machine owned by their business and has recently receive a bid for it. This machine is very unusual and there is no ready market for it. What information would be relevant to the manager when de ciding whether to accept the bid? How reliable would that information be? The manager would probably like to know the current market value of the machine before deciding whether or not to accept the bid.The current market value would be highly relevant to the final decision, but it might not be very reliable because the machine is unique and there is likely to be little information concerning market values. BUT IS IT MATERIAL? When seeking to strike the right balance between relevance and reliability, the needs of users should be the overriding consideration. ? ? ? Comparability. This quality will enable users to identify changes in the business over time (for example, the trend in sales revenue over the past ? ve years).It will also help them to evaluate the performance of the business in relation to similar businesses. Comparability is achieved by treating circumstances that are basically the same in the same manner for accounting purposes. Comparability may also be erectd by m aking clear the policies that have been adopted in measuring and presenting the information. ? Understandability. Accounting reports should be expressed as clear as possible and should be understood by those at whom the information is aimed. Activity 1. 5 Do you think that accounting reports should be understandable to those who have not analyse accounting?It would be very useful if accounting reports could be understood by everyone. This, however, is unrealistic as complex financial events and transactions cannot normally be expressed in simple terms. It is probably best that we regard accounting reports in the same way that we regard a report written in a foreign language. To understand either of these, we need to have had nearly preparation. Generally speaking, accounting reports assume that the user not only has a reasonable knowledge of business and accounting but is also brisk to invest almost time in studying the reports.Despite the answer to Activity 1. 5, the onus is c learly on accountants to provide information in a way that makes it as understandable as possible to non-accountants. But . . . is it material? ? The qualities, or characteristics, that have just been described will help us to see whether accounting information is potentially useful. If a particular piece of information has these qualities then it may be useful. However, this does not automatically mean that it should be report to users. We also have to consider whether the information is material, or signi? cant.This means that we should ask whether its omission or misrepresentation in the accounting reports would really alter the decisions that users make. Thus, in addition to possessing the characteristics mentioned above, accounting information must also cross the threshold of materiality. If the information is not regarded as material, it should not be included within the reports as it will merely clutter them up and, perhaps, interject with the users ability to interpret the ? nancial results. The type of information and amounts involved will normally determine whether it is material. 8 CHAPTER 1 INTRODUCTION TO ACCOUNTING Weighing up the exist and pull ins Having read the previous sections you may feel that, when considering a piece of accounting information, provided the four main qualities identi? ed are present and it is material it should be collected and made available to users. Unfortunately, there is one more hurdle to jump. Something may still exclude a piece of accounting information from the reports even when it is considered to be useful. Consider Activity 1. 6. Activity 1. 6 count an item of information is capable of being provided. It is relevant o a particular decision it is also reliable, comparable, can be understood by the decision maker concerned and is material. Can you think of a reason why, in institutionalise, you might choose not to produce the information? The reason that you may decide not to produce, or discover, the in formation is that you judge the cost of doing so to be greater than the potential benefit of having the information. This costbenefit issue will terminus ad quem the extent to which accounting information is provided. In theory, a particular item of accounting information should only be produced if the costs of providing it are less than the bene? s, or value, to be derived from its use. fingerbreadth 1. 2 shows the family relationship between the costs and value of providing additional accounting information. grade 1. 2 Relationship between costs and the value of providing additional accounting information The benefits of accounting information eventually decline. The cost of providing information, however, will rise with each additional piece of information. The optimal level of information readying is where the gap between the value of the information and the cost of providing it is at its greatest. WEIGHING UP THE cost AND BENEFITS The ? ure shows how the value of informatio n received by the decision maker eventually begins to decline. This is, perhaps, because additional information becomes less relevant, or because of the problems that a decision maker may have in processing the sheer sum of money of information provided. The costs of providing the information, however, will increase with each additional piece of information. The broken line indicates the point at which the gap between the value of information and the cost of providing that information is at its greatest. This represents the optimal amount of information that can be provided.This theoretical model, however, poses a account of problems in practice. We shall now go on to discuss these. To illustrate the practical problems of establishing the value of information, let us assume that someone has collided with our car in a car park and dented and scraped the paint from one of the doors. We wish to have the dent taken out and the door resprayed at a local garage. We know that the nearest garage would charge ? 250 but believe that other local garages may offer to do the job for a lower price. The only way of ? nding out the prices at other garages is to visit them, so that they can see the extent of the damage.Visiting the garages will involve using some petrol and will take up some of our time. Is it worth the cost of ? nding out the price for the job at the various local garages? The answer, as we have seen, is that if the cost of discovering the price is less than the potential bene? t, it is worth having that information. To identify the various prices for the job, there are several points to be considered, including ? How many an(prenominal) garages shall we visit? ? What is the cost of petrol to visit each garage? ? How long will it take to make all the garage visits? ? At what price do we value our time? The economic bene? of having the information on the price of the job is probably even harder to assess. The following points need to be considered ? What is the cheapest price that we might be quoted for the job? ? How likely is it that we shall be quoted a price cheaper than ? 250? As we can imagine, the answers to these questions may be furthermost from clear remember that we have only contacted the local garage so far. When assessing the value of accounting information we are confronted with similar problems. The provision of accounting information can be very costly however, the costs are often dif? cult to quantify.The direct, out-of-pocket, costs such as salaries of accounting staff are not really a problem to identify, but these are only part of the total costs involved. There are also less direct costs such as the cost of the users time spent on analysing and interpreting the information contained in reports. The economic bene? t of having accounting information is even harder to assess. It is possible to apply some science to the problem of weighing the costs and bene? ts, but a lot of subjective judgement is likely to be in volved. No one would seriously advocate that the typical business should produce no accounting information.At the same time, no one would advocate that every item of information that could be seen as possessing one or more of the key characteristics should be produced, irrespective of the cost of producing it. The characteristics that in? uence the usefulness of accounting information and which have been discussed in this section and the preceding section are set out in Figure 1. 3. 9 10 CHAPTER 1 INTRODUCTION TO ACCOUNTING Figure 1. 3 The characteristics that influence the usefulness of accounting information There are four main soft characteristics that influence the usefulness of accounting information.In addition, however, accounting information should be material and the benefits of providing the information should outweigh the costs. Accounting as an information establishment ? We have already seen that accounting can be seen as the provision of a service to clients. Another way of viewing accounting is as a part of the businesss total information system. Users, both inside and outside the business, have to make decisions concerning the allocation of uncommon economic resources. To curb that these resources are ef? ciently allocated, users need economic information on which to base decisions.It is the role of the accounting system to provide that information and this will involve information gathering and communication. The accounting information system should have certain features that are common to all valid information systems within a business. These are ? identifying and capturing relevant information (in this case ? nancial information) ? recording the information collected in a systematic manner ? analysing and interpreting the information collected ? reporting the information in a manner that suits the needs of users. The relationship between these features is set out in Figure 1. . ACCOUNTING AS AN INFORMATION SYSTEM Figure 1. 4 The accounti ng information system There are four sequential stages of an accounting information system. The first two stages are concerned with preparation, whereas the last two stages are concerned with using the information collected. Given the decision-making emphasis of this book, we shall be concerned primarily with the ? nal two elements of the process the analysis and reporting of accounting information. We shall consider the way in which information is used by, and is useful to, users rather than the way in which it is identi? ed and recorded. Ef? ient accounting systems are an essential ingredient of an ef? cient business. When the accounting systems fail, the results can be disastrous. sincere existence 1. 1 provides an example of a systems failure when two businesses combined and then attempted to integrate their respective systems. true(a) being 1. 1 Blaming the system FT When Sir Ken Morrison bought Safeway for ? 3. 35bn in butt on 2004, he almost threefold the size of his sup ermarket chain overnight and went from being a regional operator to a national force. His plan was simple enough. He had to sell off some Safeway stores Morrison has to date sold off 184 stores for an estimated ? . 3bn and convert the be 230 Safeway stores into Morrisons. Sir Ken has about another 50 to sell. But, nearly fifteen calendar months on, and the integration process is proving harder in practice than it looked on paper. Morrison, once known for its robust performance, has issued four profit warnings in the past ten months. each time the retailer has blamed Safeway. Last July, it was because of a faster-thanexpected sales decline in Safeway stores. In March there were two warnings that month it was the fault of Safeways accounting systems, which left Morrison with lower provider incomes.This months warning was put down to higher-than-expected costs from running parallel store systems. At the time of the first warning last July, Simon Procter, of the stockbrokers Charle s Stanley, noted that the news has blown all profit forecasts out of the piss and visibility is very poor from here on out. But if it was difficult then to predict where Morrisons profits were heading, it is impossible now. Morrison itself cannot give guidance. No one envisaged this, says Mr Procter. When I made that comment about visibility last July, I was thinking on a twelve-month time frame, not a biyearly one. Morrison says the complexity of the Safeway deal has put a significant strain on its ability to cope with managing interior accounts. This is impacting the ability of the board to forecast likely trends in profitability and the directors are therefore not currently in a position to provide reliable guidance on the level of profitability as a whole, admits the retailer. man-made lake Morrison in uphill battle to integrate Safeway, Elizabeth Rigby, Financial Times, 26 May 2005. As a footnote to Real World 1. 1, though Morrison had its problems, these were quickly overc ome and the Safeway takeover has proved to be a success. 1 12 CHAPTER 1 INTRODUCTION TO ACCOUNTING instruction accounting and financial accounting Accounting is usually seen as having two distinct strands. These are ? ? ? management accounting, which seeks to meet the accounting needs of managers and ? financial accounting, which seeks to meet the accounting needs of all of the other users identi? ed earlier in the chapter (see Figure 1. 1). The difference in their targeted user groups has led to each strand of accounting developing along different lines. The main areas of difference are as follows. ? Nature of the reports produced.Financial accounting reports tend to be general- ? ? ? ? ? purpose, that is, they contain ? nancial information that will be useful for a broad assert of users and decisions rather than being speci? cally designed for the needs of a particular group or set of decisions. Management accounting reports, on the other hand, are often speci? c-purpose reports . They are designed with a particular decision in mind and/or for a particular manager. Level of detail. Financial accounting reports provide users with a broad overview of the performance and position of the business for a period.As a result, information is aggregated and detail is often lost. Management accounting reports, however, often provide managers with considerable detail to help them with a particular operational decision. Regulations. Financial accounting reports, for many businesses, are subject to accounting regulations that try to ensure they are produced with easily-worn content and in a standard format. The fair play and accounting rule makers impose these regulations. As management accounting reports are for internal use only, there are no regulations from external sources concerning the form and content of the reports.They can be designed to meet the needs of particular managers. Reporting interval. For most businesses, ? nancial accounting reports are produced on an annual basis, though some large businesses produce half-yearly reports and a few produce quarterly ones. Management accounting reports may be produced as frequently as required by managers. In many businesses, managers are provided with certain reports on a daily, weekly or monthly basis, which allows them to check progress frequently. In addition, special-purpose reports will be prepared when required (for example, to evaluate a proposal to purchase a piece of equipment).Time orientation. Financial accounting reports re? ect the performance and position of the business for the past period. In essence, they are backward looking. Management accounting reports, on the other hand, often provide information concerning future performance as thoroughly as past performance. It is an oversimpli? cation, however, to suggest that ? nancial accounting reports never incorporate expectations concerning the future. Occasionally, businesses will release projected information to other users in an attempt to raise capital or to ? ght off unwanted takeover bids. yet preparation of the routine ? ancial accounting reports typically requires making some judgements about the future, as we shall see in Chapter 3. Range and quality of information. Financial accounting reports concentrate on information that can be quanti? ed in monetary terms. Management accounting also produces such reports, but is also more likely to produce reports that contain information of a non-? nancial nature, such as physical volume of inventories, cast of sales orders received, number of new products launched, physical output per employee and so on. Financial accounting places greater emphasis on the use of objective, veri? ble evidence when preparing reports. Management accounting reports may use information that is less objective and veri? able, but nevertheless provide managers with the information they need. SCOPE OF THIS BOOK We can see from this that management accounting is less constrained than ? nancial accounting. It may draw from a variety of sources and use information that has varying degrees of reliability. The only real test to be applied when assessing the value of the information produced for managers is whether or not it improves the quality of the decisions made.The distinctions between management and ? nancial accounting suggest that there are differences between the information needs of managers and those of other users. While differences doubtlessly exist, there is also a good deal of overlap between these needs. Activity 1. 7 Can you think of any areas of overlap between the information needs of managers and those of other users? We thought of two points ? ? Managers will, at times, be interested in receiving a historical overview of business operations of the sort provided to other users.Other users would be interested in receiving information relating to the future, such as the planned level of profits and non-financial information such as the state of the sales order book and the extent of product innovations. The distinction between the two areas of accounting re? ects, to some extent, the differences in access to ? nancial information. Managers have much more control over the form and content of information they receive. Other users have to rely on what managers are prepared to provide or what the ? nancial reporting regulations require to be provided. Though the scope of ? ancial accounting reports has increased over time, fears concerning passing of competitive advantage and user ignorance concerning the reliability of forecast data have led businesses to resist providing other users with the same detailed and wide-ranging information available to managers. In the past, it has been argued that accounting systems are far too geared to meeting the regulatory requirements of ? nancial accounting to be able to provide the information most facilitative to managers. This is to say that ? nancial accounting requirements have bee n the main priority and management accounting has suffered as a result.Recent survey evidence suggests, however, that this argument has lost its force. Modern management accounting systems tend to provide managers with information that is relevant to their needs rather than what is determined by external reporting requirements. Financial reporting cycles, however, retain some in? uence over management accounting and managers are aware of expectations of external users (see the reference at the end of the chapter). Scope of this book This book is concerned with ? nancial accounting rather than management accounting. In Chapter 2 we begin by introducing the three principal ? ancial statements ? the statement of ? nancial position (sometimes known as the balance sheet) ? the income statement (also called the pro? t and loss account) and ? the statement of cash ? ows. 13 14 CHAPTER 1 ? INTRODUCTION TO ACCOUNTING These statements are brie? y reviewed before we go on to consider the state ment of ? nancial position in more detail. We shall see that the statement of ? nancial position provides information concerning the wealth held by a business at a particular point in time and the claims against this wealth. Included in our consideration of the statement of ? ancial position will be an introduction to the conventions of accounting. Conventions are the generally accepted rules that accountants tend to follow when preparing ? nancial statements. Chapter 3 introduces the second of the major ? nancial statements, the income statement. This provides information concerning the wealth created by a business during a period. In this chapter we shall be looking at such issues as how pro? t is measured, the point in time at which we recognise that a pro? t has been made and the accounting conventions that apply to this particular statement.In the UK and throughout much of the industrialised human, the circumscribed come with is the major form of business unit. In Chapter 4 we consider the accounting aspects of limited companies. Although there is nix of essence that makes the accounting aspects of companies different from other types of private-sector business, there are some points of detail that we need to consider. In Chapter 5 we continue our examination of limited companies and, in particular, consider the framework of rules that must be adhered to when presenting accounting reports to owners and external users.Chapter 6 deals with the last of the three principal ? nancial statements, the statement of cash ? ows. This ? nancial statement is important in identifying the ? nancing and investing activities of the business over a period. It sets out how cash was generated and how cash was used during a period. practice session the three statements will provide information about the performance and position of a business. It is possible, however, to gain even more helpful insights about the business by analysing the statements using ? nancial ratios and other techniques. Combining two ? ures in the ? nancial statements in a ratio and comparing this with a similar ratio for, say, another business, can often tell us much more than just reading the ? gures themselves. Chapters 7 and 8 are concerned with techniques for analysing ? nancial statements. The typical large business in the UK is a group of companies rather than just a hit company. A group of companies will exist where one company controls one or more other companies. In Chapter 9 we shall see why groups exist and consider the accounting issues raised by the confederacy of companies into groups.The scope of ? nancial reporting has tended to alter over the years. In Chapter 10 we shall consider where ? nancial reporting has come from and how it seems to be developing. Finally, in Chapter 11, we shall consider the way in which larger businesses are managed and how directors and other senior managers are responsible to the owners and to other groups with an interest in the business. Has accounting become too interesting? In recent years, accounting has become front-page news and has been a major talking point among those connected with the world of business.Unfortunately, the attention that accounting has attracted has been for all the wrong reasons. We have seen that investors rely on ? nancial reports to help to persist in an eye both on their investment and on the performance of the managers. What, though, if the managers provide misleading ? nancial reports to investors? Recent revelations suggest that the managers of some large businesses have been doing just this. HAS ACCOUNTING BECOME TOO INTERESTING? Two of the most notorious cases have been those of ? Enron, an energy-trading business based in Texas, which was accused of entering into complicated ? ancial arrangements in an attempt to obscure losses and to in? ate pro? ts and ? WorldCom, a major long-distance telephone operator in the US, which was accused of reclassifying $3. 9 billion of expenses so as to falsely in? ate the pro? t ? gures that the business inform to its owners (shareholders) and to others. In the wake of these scandals, there was much closer scrutiny by investment analysts and investors of the ? nancial reports that businesses produce. This led to further businesses, in both the US and Europe, being accused of using dubious accounting practices to bolster reported pro? ts.Accounting scandals can have a profound effect on all those connected with the business. The Enron scandal, for example, finally led to the collapse of the company, which, in turn, resulted in lost jobs and large ? nancial losses for lenders, suppliers and investors. Con? dence in the world of business can be badly shaken by such events and this can pose problems for ships company as a whole. Not surprisingly, therefore, the relevant authorities tend to be severe on those who pull up such scandals. In the US, Bernie Ebbers, the former chief executive of WorldCom, received 2 5 years in prison house for his part in the fraud.Various reasons have been put forward to explain this spate of scandals. Some may have been caused by the pressures on managers to meet unrealistic expectations of investors for continually rising pro? ts, others by the greed of unprincipled executives whose pay is linked to ? nancial performance. However, they may all re? ect a particular economic environment. Real World 1. 2 gives some comments suggesting that when all appears to be going well with a business, people can be quite gullible and over-trusting. Real World 1. 2 The thoughts of Warren BuffettWarren Buffett is one of the worlds shrewdest and most prosperous investors. He believes that the accounting scandals mentioned above were perpetrated during the new economy boom of the late mid- clubties when confidence was high and exaggerated predictions were being made concerning the future. He states that during that period You had an erosion of accounting standards. You had a n erosion, to some extent, of executive behaviour. But during a period when everybody believes, people who are inclined to take advantage of other people can get away with a lot.He believes that the worst is now over and that the dirty wash drawing created during this heady period is being washed away and that the washing machine is now in the purify cycle. Source The Times, Business Section, 26 September 2002, p. 25. nisyndication. com. Whatever the causes, the result of these accounting scandals has been to undermine the believability of ? nancial statements and to introduce much stricter regulations concerning the quality of ? nancial information. We shall return to this issue in later chapters when we consider the ? nancial statements. 15 16 CHAPTER 1INTRODUCTION TO ACCOUNTING The changing face of accounting Over the past 25 years, the environment within which businesses operate has become change magnitudely turbulent and competitive. Various reasons have been identi? ed to e xplain these changes, including ? the increasing sophistication of customers ? the exploitation of a global economy where national frontiers become less important ? rapid changes in technology ? the deregulation of domestic markets (for example, electricity, water and gas) ? increasing pressure from owners (shareholders) for competitive economic returns ? he increasing capriciousness of ? nancial markets. This new, more complex, environment has brought new challenges for managers and other users of accounting information. Their needs have changed and both ? nancial accounting and management accounting have had to respond. To meet the changing needs of users there has been a radical review of the kind of information to be reported. The changing business environment has given added impetus to the search for a clear framework and principles upon which to base ? nancial accounting reports. Various attempts have been made to clarify the purpose of ? ancial accounting reports and to pro vide a more solid foundation for the development of accounting rules. The frameworks and principles that have been developed try to address fundamental questions such as ? Who are the users of ? nancial accounting information? ? What kinds of ? nancial accounting reports should be prepared and what should they contain? ? How should items (such as pro? t and asset values) be measured? In response to criticisms that the ? nancial reports of some businesses are not clear enough to users, accounting rule makers have tried to improve reporting rules to ensure that the accounting policies of businesses are ore comparable and more transparent, and that they portray economic reality more faithfully. While this has had a generally bene? cial effect, the recent accounting scandals have highlighted the limitations of accounting rules in protecting investors and others. The internationalisation of businesses has created a need for accounting rules to have an international reach. It can no long be assumed that users of accounting information relating to a particular business are based in the country in which the business operates or are familiar with the accounting rules of that country.Thus, there has been increasing harmonisation of accounting rules across national frontiers. A more detailed review of these developments is included in Chapter 5. Management accounting has also changed by becoming more outward looking in its focus. In the past, information provided to managers has been largely restricted to that collected within the business. However, the attitude and behaviour of customers and rival businesses have now become the object of much information gathering. Increasingly, successful businesses are those that are able to secure and maintain competitive advantage over their rivals.To obtain this advantage, businesses have become more customer driven (that is, concerned with satisfying customer needs). This has led to management accounting information that provides details of customers and the market, such as customer evaluation of services provided and market share. In addition, information about the costs and pro? ts of rival businesses, which can be used as benchmarks by which to label competitiveness, is gathered and reported. WHAT KINDS OF BUSINESS OWNERSHIP EXIST? To compete successfully, businesses must also ? d ways of managing costs. The cost base of modern businesses is under continual review and this, in turn, has led to the development of more in advance(p) methods of measuring and controlling costs. What kinds of business ownership exist? The particular form of business ownership has important implications for accounting purposes and so it is useful to be clear about the main forms of ownership that can arise. There are basically three arrangements ? repair proprietorship ? federation and ? limited company. Each of these is considered below. Sole proprietorship ?Sole proprietorship, as the name suggests, is where an individu al is the sole owner of a business. This type of business is often quite half-size in terms of size (as measured, for example, by sales revenue generated or number of staff employed) however, the number of such businesses is very large indeed. Examples of sole-proprietor businesses can be found in most industrial sectors but particularly within the service sector. Hence, services such as electrical repairs, picture framing, photography, driving instruction, retail shops and hotels have a large proportion of sole-proprietor businesses.The sole-proprietor business is easy to set up. No formal procedures are required and operations can often commence immediately (unless special licence is required because of the nature of the trade or service, such as running licensed premises). The owner can decide the way in which the business is to be conducted and has the ? exibility to restructure or dissolve the business whenever it suits. The police force does not recognise the sole-proprieto r business as being separate from the owner, so the business will kick on the death of the owner.Although the owner must produce accounting information to satisfy the taxation authorities, there is no legal requirement to produce accounting information relating to the business for other user groups. However, some user groups may demand accounting information about the business and may be in a position to have their demands met (for example, a bank requiring accounting information on a regular basis as a condition of a loan). The sole proprietor will have immeasurable liability which means that no distinction will be made between the proprietors personal wealth and that of the business if there are business debts that must be paid. let onnership ? A union exists where at least two individuals carry on a business together with the intention of making a pro? t. Partnerships have much in common with sole-proprietor businesses. They are usually quite small in size (although some, such as partnerships of accountants and solicitors, can be large). Partnerships are also easy to set up as no formal procedures are required (and it is not even necessary to have a written agreement between the partners). The partners can agree whatever arrangements suit them concerning the ? nancial and management aspects of the business.Similarly, the partnership can be restructured or dissolved by agreement between the partners. 17 18 CHAPTER 1 INTRODUCTION TO ACCOUNTING Partnerships are not recognised in law as separate entities and so contracts with third parties must be entered into in the name of individual partners. The partners of a business usually have unlimited liability. Activity 1. 8 What are the main advantages and disadvantages that should be considered when deciding between a sole proprietorship and a partnership? The main advantages of a partnership over a sole-proprietor business are ? ? ? sharing the burden of ownership he opportunity to specialise rather than cover the whole range of services (for example, in a solicitors practice each partner may specialise in a different aspect of the law) the ability to raise capital where this is beyond the capacity of a single individual. The main disadvantages of a partnership compared with a sole proprietorship are ? ? the risks of sharing ownership of a business with unsuitable individuals the limits placed on individual decision making that a partnership will impose. special(a) company ? Limited companies can range in size from quite small to very large.The number of individuals who subscribe capital and become the owners may be unlimited, which provides the opportunity to create a very large business. The liability of owners, however, is limited (hence limited company), which means that those individuals subscribing capital to the company are liable only for debts incurred by the company up to the amount that they have agreed to invest. This cap on the liability of the owners is designed to limit r isk and to produce greater con? dence to invest. Without such limits on owner liability, it is dif? cult to see how a modern capitalist economy could operate.In many cases, the owners of a limited company are not involved in the day-to-day running of the business and will, therefore, invest in a business only if there is a clear limit set on the level of investment risk. The bene? t of limited liability, however, imposes certain obligations on such companies. To start up a limited company, documents of incorporation must be prepared that set out, among other things, the objectives of the business. Furthermore, a framework of regulations exists that places obligations on limited companies concerning the way in which they conduct their affairs. Part of this regulatory framework requires annual ? ancial reports to be made available to owners and lenders and usually an annual general meeting of the owners has to be held to approve the reports. In addition, a copy of the annual ? nancial reports must be lodged with the Registrar of Companies for creation inspection. In this way, the ? nancial affairs of a limited company enter the public domain. With the exception of small companies, there is also a requirement for the annual ? nancial reports to be subject to an audit. This involves an independent ? rm of accountants examining the annual reports and underlying records to see whether the reports provide a true and fair view of the ? ancial health of the company and whether they comply with the relevant accounting rules established by law and by accounting rule makers. All of the large household-name UK businesses (Marks and Spencer, Tesco, Shell, BSkyB, BA, BT, easyJet and so on) are limited companies. Limited companies are considered in more detail in Chapters 4 and 5. HOW ARE BUSINESSES set up? Activity 1. 9 What are the main advantages and disadvantages that should be considered when deciding between a partnership business and a limited liability company?The m ain advantages of a partnership over a limited company are ? ? ? ? the ease of setting up the business the degree of flexibility concerning the way in which the business is conducted the degree of flexibility concerning restructuring and dissolution of the business freedom from administrative burdens imposed by law (for example, the annual general meeting and the need for an independent audit). The main disadvantage of a partnership compared with a limited company is the fact that it is not possible to limit the liability of all of the partners.This book concentrates on the accounting aspects of limited liability companies because this type of business is by far the most important in economic terms. The early chapters will introduce accounting concepts through examples that do not draw a distinction between the different types of business. Once we have dealt with the basic accounting principles, which are the same for all three types of business, we can then go on to see how they ar e applied to limited companies. It must be emphasised that there are no differences in the way that these three forms of business keep their day-to-day accounting records.In preparing their periodic ? nancial statements, there are certain differences that need to be considered. These differences are not ones of principle, however, but of detail. How are businesses organised? As we have just seen, nearly all businesses that involve more than a few owners and/or employees are set up as limited companies. This means that the ? faery will come from the owners (shareholders) both in the form of a direct cash investment to buy shares (in the ownership of the business) and through the owners allowing past pro? s, which belong to them, to be reinvested in the business. Finance will also come from lenders (banks, for example), who earn interest on their loans and from suppliers of goods and services being prepared to supply on credit, with payment occurring a month or so after the date of su pply, usually on an interest-free basis. In larger limited companies, the owners (shareholders) are not involved in the daily running of the business instead they appoint a board of directors to manage the business on their behalf. The board is charged with three major tasks ? etting the boilers suit direction and strategy for the business ? monitoring and controlling its activities and ? communicating with owners and others connected with the business. Each board has a chairwoman, elected by the directors, who is responsible for running the board in an ef? cient manner. In addition, each board has a chief executive of? cer (CEO), or managing director, who is responsible for running the business on a dayto-day basis. Occasionally, the roles of chairman and CEO are combined, although it is usually considered to be a good idea to eparate them in order to proceed a single individual having excessive power. We shall come back to consider the relationship between directors and sharehol ders in more detail in Chapter 4. 19 20 CHAPTER 1 INTRODUCTION TO ACCOUNTING The board of directors represents the most senior level of management. Below this level, managers are employed, with each manager given responsibility for a particular part of the businesss operations. What is the financial objective of a business? A business is created to enhance the wealth of its owners.Throughout this book we shall assume that this is its main objective. This may come as a surprise, as there are other objectives that a business may pursue that are related to the needs of others associated with the business. For example, a business may seek to provide good working conditions for its employees, or it may seek to follow the environment for the local community. While a business may pursue these objectives, it is normally set up with a view to increasing the wealth of its owners. In practice, the behaviour of businesses over time appears to be concordant with this objective.Real World 1. 3 reveals how one well-known business has changed its focus in order to improve pro? tability. Real World 1. 3 Profiting from change It speaks volumes for the work done by Kate Swann in turning round W H Smith that when she became chief executive five years ago, the company was being intercommunicate of in similar tems to Woolworths. Comments such as You wouldnt invent it if you were starting out today and What is it actually for these days? were typical among analysts, as they were with Woolies.Indeed, many thought that W H Smith was beyond help and argued that the supermarkets were eating away at sales. Ms Swann has defied the sceptics, achieving an impressive turnaround. The companys magazine and newspaper dispersal division was hived off as a separate entity and new outlets were opened at airports and railway move so much so that sales by W H Smiths run unit now threaten to overtake those of its traditional high street stores. Lower-profit-margin lines, such as CDs and DVDs , have been cleared from the shelves to make way for higher-margin items, such as stationery.The last plank of the strategy was in evidence again in yesterdays update, in which Ms Swann reported that sales in the nine weeks to January 17 were down by 7 per cent in the high street stores and by 2 per cent in the travel stores, partly because W H Smith is continuing to reduce its pic to the fun category. That was the bad news. The good news was that, although sales overall were down, the reduced focus on entertainment was good for profits. W H Smith made an extra 2p of profit in every ? 1 of sales, compared with the same period a year earlier, a stunning achievement given the deflation hitting the high street.Source Business big shot, Ian King, The Times, 27 January 2009, p. 39. nisyndication. com. Within a market economy there are strong competitive forces at work that ensure that failure to enhance owners wealth will not be tolerated for long. Competition for the funds provided by the owners and competition for managers jobs will normally mean that the owners interests will prevail. If the managers do not provide the expected increase in ownership wealth, the owners have the power to replace the existing management team with a new team that is more responsive to owners needs. WHAT IS THE FINANCIAL OBJECTIVE OF A BUSINESS?Does this mean that the needs of other groups associated with the business (employees, customers, suppliers, the community and so on) are not really important? The answer to this question is certainly no, if the business wishes to survive and prosper over the longer term. gratifying the needs of other groups will normally be consistent with increasing the wealth of the owners over the longer term. The importance of customers to a business cannot be overstated. Dissatis? ed customers will take their business to another supplier and this will, in turn, lead to a loss of wealth for the owners of the business losing the customers.Real World 1. 4 provides an illustration of the way in which one business acknowledges the link between customer satisfaction and creating wealth for its owners. Real World 1. 4 Checking out Sainsburys objectives J Sainsbury plc is a leading food retailer that recognises the importance of customers to increasing the wealth of the owners (shareholders) as follows Our objective is to serve customers well and thereby provide shareholders with good, sustainable financial returns. Source Investor FAQs, www. j-sainsbury. co. uk, 8 January 2009, p. 1. A dissatis? d workforce may result in low productivity, strikes and so forth, which will in turn have an adverse effect on owners wealth. Similarly, a business that upsets the local community by unacceptable behaviour, such as polluting the environment, may attract bad publicity, resulting in a loss of customers and heavy ? nes. Real World 1. 5 provides an example of how two businesses responded to potentially damaging allegations. Real World 1. 5 The pric e of clothes FT US clothing and sportswear manufacturers Gap and Nike have many of their clothes produced in Asia where labour tends to be cheap.However, some of the contractors that produce clothes on behalf of the two companies have been accused of unacceptable practices. Campaigners visited the factories and came up with damaging allegations. The factories were employing minors, they verbalise, and managers were harassing female employees. Nike and Gap reacted by allowing independent inspectors into the factories. They promised to ensure their contractors obeyed minimum standards of employment. Earlier this year, Nike took the extraordinary step of publishing the names and addresses of all its contractors factories on the internet.The company said it could not be sure all the abuse had stopped. It said that if campaigners visited its contractors factories and found examples of continued malpractice, it would take action. Nike and Gap said the approach made business sense. They n eeded societys approval if they were to prosper. Nike said it was concerned about the reaction of potential US recruits to the campaigners allegations. They would not want to work for a company that was constantly in the news because of the allegedly cruel treatment of those who made its products. Source Fair shares? , Michael Skapinker, Financial Times, 11 June 2005. 21 22 CHAPTER 1 INTRODUCTION TO ACCOUNTING It is important to recognise that generating wealth for the owners is not the same as seeking to maximise the current years pro? t. Wealth creation is a longer-term concept, which relates not only to this years pro? t but to that of future years as well. In the short term, corners can be cut and risks taken that improve current pro? t at the expense of future pro? t. Real World 1. 6 gives some examples of how emphasis on short pro? t can be damaging. Real World 1. 6 Short-term gains, long-term problemsFT forgiving beings are bad at learning and changing. It takes a good cris is to drive home what may have been staring us in the face. So what in particular are the lessons for all those concerned with saving, investment, acquire and lending? For many years, under the guise of defending capitalism, we have been allowing ourselves to degrade it. We have been poisoning the well from which we have drawn wealth. We have misunderstood the importance of values to capitalism. We have surrendered to the idea that success is chased by making as much money as the law allowed without regard to how it was made.Thirty years ago, retailers would b